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Answer this fully please PepsiCo, Inc. (PEP), the parent company of Frito-Lay snack foods and Pepsi beverages,...

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Accounting

Answer this fully please

PepsiCo, Inc. (PEP), the parent company ofFrito-Lay snack foods and Pepsi beverages, had the followingcurrent assets and current liabilities at the end of two recentyears:

Current Year
(in millions)		Previous Year
(in millions)
Cash and cash equivalents$9,158$9,096
Short-term investments, at cost6,9672,913
Accounts and notes receivable, net6,6946,437
Inventories2,7232,720
Prepaid expenses and other current assets1,5471,865
Short-term obligations6,8924,071
Accounts payable14,24313,507

a. Determine the (1) current ratio and (2)quick ratio for both years. Round to one decimal place.

Current YearPrevious Year
1. Current ratio
2. Quick ratio

Answer & Explanation Solved by verified expert
4.0 Ratings (688 Votes)

Current Year Previous Year
1. Current ratio 1.3 1.3
2. Quick ratio 1.1 1.0
Workings:
Current Year Previous Year
Cash and cash equivalents 9158 9096
Short-term investments, at cost 6967 2913
Accounts and notes receivable, net 6694 6437
Inventories 2723 2720
Prepaid expenses and other current assets 1547 1865
Total Current Assets 27089 23031
Current Year Previous Year
Cash and cash equivalents 9158 9096
Short-term investments, at cost 6967 2913
Accounts and notes receivable, net 6694 6437
Total quick assets 22819 18446
Current Year Previous Year
Short-term obligations 6892 4071
Accounts payable 14243 13507
Total Current Liabilities 21135 17578
1
Current Year Previous Year
Total Current Assets 27089 23031
Divide by Total Current Liabilities 21135 17578
Current ratio 1.3 1.3
2
Current Year Previous Year
Total quick assets 22819 18446
Divide by Total Current Liabilities 21135 17578
Quick ratio 1.1 1.0

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